European Parliament approves final four legislative acts of fourth energy package

On Tuesday, the European Parliament approved another 4 legislative acts from the package known as the “Clean energy for all Europeans package” (note: Clean energy for all Europeans package). Following subsequent approval by the Council of the European Union, scheduled for May this year and expected to be merely a formal step, the adoption of the fourth energy package will be completed. 

The long-prepared fourth energy package was adopted by the European Parliament after approximately two and a half years. The final 3 regulations and one directive were adopted, covering, among other things, rules for the internal electricity market, the functioning of the electricity market and rules for the Agency for the Cooperation of Energy Regulators.

One of the main tasks of the remaining legislative acts is to strengthen cross-border electricity trade, introduce rules for capacity markets and establish price regulation. In terms of cross-border trade, the aim of the new legislation is for at least 70 % of trading capacity to be available for cross-border trade.

Among other things, the legislation also includes the previously discussed limit of 550g CO2/kWh set for power plants included in capacity mechanisms. Power plants with higher specific emissions will no longer be able to participate in capacity mechanisms.

“I am extremely pleased that we have managed to reach agreement on the form of regulation for capacity mechanisms that will ensure these mechanisms are consistent with our climate policy objectives.”
Miguel Arias Cañete, European Commissioner for Climate Action and Energy

However, existing capacity contracts do not necessarily need to be changed. Any contracts concluded by the end of this year will not yet be affected by the new emissions limits. Subsequently, the limits will apply to all newly commissioned power plants and to existing power plants from 2025.

As in the case of the first three energy packages, the powers of supranational energy bodies have also been slightly expanded this time. The Agency for the Cooperation of Energy Regulators will newly have expanded powers to decide cross-border disputes.

“Thanks to today’s approval by the European Parliament of the new electricity market design, the market will be more flexible and will enable a greater amount of renewable energy sources to be integrated into the system. An integrated European electricity market is the most cost-effective solution for ensuring secure and affordable supplies for all citizens of the European Union.”
Miguel Arias Cañete, European Commissioner for Climate Action and Energy

Already in the middle and at the end of last year, the directive on the promotion of the use of energy from renewable sources, the directive amending Directive 2012/27/EU on energy efficiency, the regulation on the governance of the Energy Union and climate action and the directive amending Directive 2010/31/EU on the energy performance of buildings and Directive 2012/27/EU on energy efficiency were adopted.